Medicaid expansion brings tough questions

Wednesday

Jul 11, 2012 at 12:01 AMJul 26, 2012 at 9:31 AM

Jason Hunsicker

Kirksville Daily Express

Kirksville, Mo. — Hundreds of thousands of Missouri’s poorest residents will not have access to affordable health insurance if the state chooses against expanding its Medicaid program, thanks to a gap created by the Supreme Court’s Affordable Care Act ruling regarding Medicaid, though opting into the program would cost the state more than $400 million through 2019.

Jason Hunsicker/Kirksville Daily Express

Kirksville, Mo. — Hundreds of thousands of Missouri’s poorest residents will not have access to affordable health insurance if the state chooses against expanding its Medicaid program, thanks to a gap created by the Supreme Court’s Affordable Care Act ruling regarding Medicaid, though opting into the program would cost the state more than $400 million through 2019.
As passed by Congress in 2010, the ACA required all states to expand Medicaid coverage to any individual with income up to 133 percent of the poverty level, or roughly $14,386 per year. States that did not opt into the expansion would have lost all federal Medicaid funding.
However, the Supreme Court ruled the proposed Medicaid expansion was a new government program and could not be forced upon the states, nor could penalties be enforced on other existing programs.
That ruling, combined with Missouri’s already restrictive Medicaid program, could mean no coverage for adults and an immense financial burden on the state’s hospitals, such as Kirksville’s Northeast Regional Medical Center.
Currently, Missouri’s Medicaid program provides coverage to children living in households with incomes up to 300 percent of poverty, and for the parents of those children only if their income does not exceed 17 percent - or $3,600 a year - of the poverty line. Adults without children cannot gain access to Medicaid.
And while the ACA provides those at 100 percent and above poverty with subsidies to purchase health plans from insurance exchanges, those below 100 percent - below the poverty line - were expected to be covered by the Medicaid expansion and do not qualify for subsidized plans.
Missouri has an estimated 835,000 people living without health insurance, around 300,000 of whom would have likely qualified for the expanded Medicaid and could be left without health insurance if the state declines the expansion. If the state opts in, all Missourians up to 133 percent of the poverty line – regardless of whether they have children – would have access to Medicaid.
“Those are the people most in need, with no access,” said Thomas McAuliffe, policy analyst with the Missouri Foundation for Health. He noted those living in poverty are also not affected by the “individual mandate” due to their low income levels.
Gov. Jay Nixon has remained mostly silent about the Affordable Care Act and has not indicated if he would pursue expanding Medicaid in the state. GOP gubernatorial contenders Dave Spence and Bill Randles have both stated they would oppose any expansion.
If Missouri opts in, however, it would gain access to billions in federal aid to cover the new Medicaid recipients.
The cost of providing Medicaid to Missourians is currently split between 60 percent federal funding, and 40 percent from the state. Those who would qualify under the “expansion medicaid population” beginning in 2014 would be covered 100 percent by federal funds until 2016, when split would move to 95-5 before settling at 90 percent federal and 10 percent state funding in 2018 and beyond.
“For every dollar spent on expansion Medicaid, the federal government would pick up 90 cents of it,” McAuliffe said of the final breakdown.
He said current estimates state Missouri would be on the hook for a total of $430 million in new Medicaid spending through 2019, while receiving $8.5 billion in federal dollars over the same period. That could make the ultimate decision a financially-driven one, as the state has already fought deep budget shortfalls in recent years.
Not opting into the Medicaid expansion would also have repercussions for the state’s hospitals, who would still be required by law to treat anyone visiting an emergency room, regardless of whether they have health insurance. Hospitals currently receive federal dollars - also known as Disproportionate Share Hospital payments - but that funding will be phased out over the next 10 years.
“It’s of great concern, especially for rural hospitals,” McAuliffe said.
Expanded Medicaid could provide a lift for public health providers such as the Adair County Health Department, which recently saw another 17 percent cut in state funding. The health department provides care for some people with no insurance, and due to its public-entity status receives no reimbursement for those costs.
Expanded Medicaid would allow the department to submit bills and receive funds, instead of taking hits to their budget.